Visitors are not allowed to use local currency, except in certain areas - another intrigue regarding the hermit country.
Rather than accept their country’s currency, North Korean stores selling imported items are regulated to only accept ‘strong’ currencies, such as U.S. dollars, euros, Japanese yen, and Chinese yuan.
Only two supermarkets licensed to sell goods to foreigners accept domestic currency, with on-site foreign exchange counters available to sell foreign currencies and buy North Korean won.
Domestic currency, however, is compulsory for locals at markets, retail outlets, trade stores, and coupon shops, where locals shop for food, goods, and services with coupons and stamps issued by the government.
As foreigners are restricted from using local money, two Tuoi Tre(Youth) newspaper reporters in North Korea made do with U.S. dollars, Chinese yuan, and other currencies during their recent trip.
One of the reporters revealed that his tour guide only allowed him to hold the won once during their visit.
Dying for some local cash, luck smiled on the reporters when a Chinese man in Dandong, a prefecture-level city in southeastern Liaoning Province in China, agreed to give them some banknotes after they crossed over from the North Korean border.
Apart from a number of strictly censored photos and some gifts, the reporters contently left North Korea with some hard-acquired 5,000-won notes.
After buying a souvenir in Kaesong, a city in North Hwanghae Province in the southern part of North Korea, one of the tour members showed a handful of small-denomination bills made up of an assortment of paper notes and coins in different currencies.
He said he gave US$50 for items worth less than $20.
The shop assistant managed to scrape up more than 10 U.S. dollars in change and offered the remainder in euro, Chinese yuan, and Japanese yen.
The journalists observed that only one type of won is used in North Korea, whereas in the past there used to be three different forms of the currency.
According to a former member of the diplomatic staff of an Association of Southeast Asian Nations (ASEAN) nation, conversion of foreign exchange remains rampant on the North Korean ‘black market.’
During their journey, the journalists were concerned about how to use the local money, particularly foreign exchange rates for the euro, the British pound, and the U.S. dollar.
They once bought a gift at a store in Pyongyang, the country’s capital, and paid a rate of one dollar for 100 won.
It turned out that the difference in the two currencies was unreasonably huge.
A resident in Dandong, China, who regularly conducts transactions with North Koreans revealed one U.S. dollar is equivalent to 8,300 won, a figure also confirmed by a foreign diplomat in the East Asian country.
The rate on the black market is thus 83 times higher than that adopted by several foreigner-serving shops in the country.
Three different types of won
In the past, the North Korean currency featured three different types of won before the government shrank that number to two, and now one.
A Vietnamese man who had stayed in North Korea recalled that back in 1989 two of the varieties were meant for expats and the other for locals.
One of the two varieties meant for expats and foreigners could be used to buy anything, while holders of the other won could only purchase items produced by countries of the socialist bloc and North Korea.
The third type could only buy domestically produced items.
Duong Chinh Thuc, former three-term Vietnam Ambassador to North Korea, affirmed that the reporters’ 5,000-won bill is the red type typically meant for locals.
“The so-called red and blue bills, intended for natives and foreigners respectively, were in circulation during my terms, which ended in 1996,” he added.
The red won did not have an official foreign exchange rate against the U.S. dollar, while one dollar was equivalent to a few blue won.
The blue won could only be used at foreigner-serving shops with exorbitant prices and poor variety.
Meanwhile, the red won was blessed with easy access to a wide array of necessities, including fresh food, Thuc added.
The diplomat added that expats in North Korea back then were in dire need of red won to buy fresh food at markets, whereas well-off natives craved the blue won to shop for luxury items at foreigner-serving shops.
Illegal conversion of the two types was rampant on the black market.
The red and blue won could be found in the same denominations, but each blue won was actually worth hundreds of red won on the black market.
Despite the government’s stringent ban on the illegal exchange of won among expats and locals, foreigners and natives somehow managed to circumvent this obstacle.
“We sought help from Vietnamese high school and university students who mingled with a number of North Korean counterparts and asked them to fetch anything from the market that their hearts desired,” he added.
Vietnamese Embassy, 1.7 hectares wide
Pyongyang is home to 24 embassies of different countries and territories.
The Russian Embassy, located in the downtown city, occupies seven hectares, making the edifice the largest foreign mission in North Korea.
Next is the Chinese Embassy, spanning around five kilometers.
The embassies of the remaining countries are all situated in Taedonggang District.
The Vietnamese diplomatic headquarters, spanning 1.7 hectares, is the third largest.
The area earmarked for international diplomatic delegations houses supermarkets, schools and hospitals, which are almost exclusive to foreigners.
A diplomatic officer said that around 700 expats currently work in North Korea.
Despite the limited number, the government has provided foreign diplomats with their own mobile phone network, which allows them to make international calls, but not to call North Koreans.
They also have access to 3G, which costs around one U.S. dollar/10MB.
Locals can also use mobile phones but are only permitted to phone each other and are prohibited from international calls.